EEOC Reasonable Cause Determinations Increase in 2014, Littler Report Finds

Author: Marta Moakley, XpertHR Legal Editor

January 8, 2015

Law firm Littler has issued its Annual Report on EEOC Developments regarding the agency's 2014 activities, which shows that the agency issued reasonable cause determinations in 45% of systemic investigations conducted in 2014 compared to 35% in Fiscal Year 2013. The report, which examines available EEOC data from an employer's perspective, emphasizes that many questions remain in select EEOC cases from 2014, including a forthcoming Supreme Court ruling in the EEOC v. Mach Mining case (regarding the agency's conciliation obligations).

Littler's report provides a "Top Ten List" of EEOC developments to watch in 2015:

  • Conciliation obligations of the EEOC prior to filing suit, a topic that is scheduled for oral argument before the Supreme Court next Tuesday;
  • Employer obligations involving pregnant workers, as addressed in the EEOC's July Enforcement Guidance and also to be examined by the Supreme Court in this term's Young v. UPS case;
  • EEOC challenges to hiring barriers;
  • Scope of reasonable accommodations under the Americans With Disabilities Act (ADA), with particular attention to the EEOC v. Ford Motor Company case pending before the Sixth Circuit Court of Appeals;
  • Required accommodations involving religion, to be discussed in the Supreme Court's EEOC v. Abercrombie case this term;
  • EEOC challenges to the voluntary nature of wellness programs;
  • Nature and extent of rights of lesbian, gay, bisexual and transgender (LGBT) workers under Title VII;
  • Challenges to releases and/or arbitration programs;
  • "Directed investigations" under the Equal Pay Act (EPA) and the Age Discrimination in Employment Act (ADEA); and
  • Scope of permitted pattern or practice litigation against employers.

In an interview with XpertHR, Barry A. Hartstein, Shareholder and Co-Chair of Littler's EEO & Diversity Practice Group and the report's executive editor, stressed the "many significant issues" making their way through the federal courts in the upcoming year. "The EEOC is trying to move the dial in some respect," said Hartstein. As shown by the Top Ten List, a number of cases are either on appeal at the circuit level or are before the Supreme Court for review.

Littler's report highlights that, during 2014, the EEOC suffered certain setbacks in court rulings in several cases, ranging from unfavorable fee awards (the Fourth Circuit's EEOC v. Propak Logistics, Inc. and the Sixth Circuit's EEOC v. Peoplemark) to losses in disparate-impact cases (e.g., EEOC v. Kaplan Higher Education Corporation, et al.). However, Hartstein cautions that he "never likes to underestimate the EEOC." Although courts may have sided with employers in certain cases (such as separate disparate-impact cases that relied on the same expert witness), Hartstein cautions that, even if "the EEOC is making mistakes in big systemic cases, it is also learning from those mistakes."

Although the overall number of the EEOC's completed systemic investigations is down (260 in 2014 compared to 300 in 2013), Hartstein cautions that employers must be "very careful because systemic investigations bring significant risk compared to a typical charge." In fact, Hartstein calls these types of investigations a "double whammy," because the risk factors are higher (the cases involve 20 or more employees) and courts typically do not second-guess an EEOC reasonable cause determination.

Hartstein also cautions employers regarding the risk involved with respect to the EEOC's authority to conduct "directed investigations." An employer may find itself the target of a directed investigation, even in the absence of a charge, because it may conduct a directed investigation regarding equal pay violations or age discrimination. Directed investigations may arise from an anonymous tip, an EEO-1 report or may develop from an ongoing investigation, such as a Department of Labor wage and hour audit (the authority for direct investigations stems from the Fair Labor Standards Act).

In addition, employers should be wary of language in any release or agreement that would interfere with employees' access rights to the EEOC. According to Hartstein, any language in a release or arbitration agreement that could be construed to limit an employee's ability to file a complaint with the agency (e.g., a confidentiality clause) should be scrutinized and may need a qualifier specifically allowing access to the EEOC.

With respect to the EEOC's pending lawsuits seeking to ensure the voluntary nature of workplace wellness programs, Hartstein cautions that this legal area is currently "incredibly murky" for employers. Because wellness programs concern the intersection between requirements of the Affordable Care Act and the ADA, employers should continue to monitor related legal developments in 2015.